According to many recent reports in the press, it appears that Xchange, Inc. , once one of the leading marketing automation and analytics providers, has very recently closed down its operations. Xchange was founded by Andy Frawley in 1994 as Exchange Applications Inc. The news possibly comes as not a big surprise to informed market observers and/or to many of the company's customers, as it had at least for over a year been in a very difficult financial situation, and, consequently, it had frantically explored possible survival options like finding a buyer after a major restructuring in 2002 and/or seeking a deal to return to a privately-held status. However, having not succeeded at either, and when the cash was completely burned up, the vendor had no choice but to abruptly seize its operations after the bank foreclosure.
The company had hemorrhaged money for several years, and its stock was de-listed from NASDAQ last year. During the past two months, it has further shed 75 employees, albeit at its prime, it employed 450. Its assets, including a notable customer base in Financial Services and Insurance (e.g., Citigroup, Citibank, Allstate, JP Morgan Chase, Fidelity, etc.), Retail (e.g., Bose, Gateway, Circuit City, Staples, etc.), and Telecommunications sectors (e.g., Sprint, Verizon, etc.), were auctioned off on March 11. The auction was reportedly held at the law offices of Reimer and Braunstein LLP in Boston and included everything from customer contracts and patents to computers, equipment, and office furniture, according to reports.
Initially, allegedly over 20 companies expressed interest in buying Xchange's assets, and in maintaining its products and supporting its customers, including direct competitors Chordiant Software, DoubleClick, SAS and Unica. While marketing management software vendor Unica was initially marked as a very likely buyer of the company, the vendor, however, announced on March 10 that it had elected not to make a bid for the Xchange's assets. Rather, Unica has announced a migration plan from Xchange's solutions to its Affinium platform. The vendor has reportedly decided not to participate in the auction, because Xchange's main assets — the software developers — were likely no longer with it. Also, Unica has already migrated approximately 15% of Xchange's customer base to Affinium, and the vendor touts that regardless of which company takes ultimate ownership of Xchange's remaining assets, converting to Affinium will be the most attractive solution for Xchange customers.
Consequently, given Unica's and DoubleClick's absence from the bidding, the winning bidder was Amdocs (NASDAQ: DOX), a provider of billing systems, customer care and support for the communications industry. Amdocs, which was not initially expected to be a strong bidder, reportedly outbid SAS to win the Xchange's remains for slightly more than $5 million. Although not a stranger to CRM products acquisitions given its earlier acquisition of the former leading CRM product Clarify in 2001 for $200 million (see Clarity of Vision: Clarify Sold to Amdocs by Nortel ), its latest acquisition of Xchange has raised many eyebrows. Amdocs does not have a blissful track record with the former purchase so far. To be fair, Amdocs has not exactly left the ClarifyCRM product in the dust, given the release of ClarifyCRM 11 in September 2002, which featured thin client support, a process manager module, and an XML-based integration gateway.
On the other hand, even during 2002, while battling to secure new finances, Xchange surprisingly managed to build a strong real-time engine to deliver targeted promotions based capability to detect important customer events and behaviors from transactional data throughout multiple marketing channels within an enterprise. Even as late as January 9, 2003 the company announced the release of its Xchange 9 browser-based suite that enables marketers to automatically trigger an appropriate communication to the customer immediately after they exhibit a behavior representing a cross-sell, up-sell, or retention opportunity, and that thereby answers the question when' to initiate a marketing interaction. Further, the Xchange 9 EDM (Event Driven Marketing) Option allows users the ability to observe data from multiple sources within the enterprise, look for changes to the state' of the customer, and action the direct marketing via the Xchange 9 platform, which is in contrast to leveraging historical information using traditional data mining tools or writing complex SQL-based queries to produce new predictive models long after the marketing opportunity has past.
One may sound too wise after the event, but the writing on the wall had long been visible for Xchange, and for many like marketing campaign management specialists. The CRM market remains both the land of opportunity but with many treacherous patches of quicksand for those that are not certain about their footprint breadth in the field. It has been a �no brainer' the fact that the 2000s have been adverse years in the entire enterprise applications market. Following the whopping growth rates of the late 1990s, and the spending surge on sexy e-Business-related technology in 2000, hard times worldwide and in almost all sectors have since subsequently morphed into harrowing times for all enterprise systems providers alike. While the biggest and/or the richest have been able to hang onto flat new sales, possibly modest declines, or in other cases possibly modest growth, only a lucky and/or the most apt few with a true differentiation in a selected number of markets (e.g., supply chain execution (SCE)) have even bucked the trend and have shown some enviable growth.
It might be interesting to analyze the recent years of enterprise resource planning (ERP) and customer relationship management (CRM) markets to discern how fortunes may often fluctuate and go in different directions. The term ERP, if not necessarily coming back into fashion, certainly is no longer a bad, �pass�' term of a few years ago, when almost all vendors were distancing themselves from the association (like from a plague) because ERP was then perceived as off-putting (i.e., intra-enterprise vs. entire supply chain and collaboration focus). At the same time, anything associated with customer or front-office interaction was all the rage, attracting both venture capitalists to pour their capital into new startup companies with brave ideas, while the customers were (over)buying these applications owing to then buoyant economy and the apparent need to better manage seemingly mushrooming customer bases.
The appeal of marketing automation has come from its ability to tailor marketing campaigns and to track their effectiveness and control marketing costs and to perform better targeted, finer-grained, multi-stage campaigns. Having also gathered a number of high-profile early adopter customers worldwide, and enticed by then large market capitalizations, Xchange had followed suit and had gone public (NASDAQ: EXAP), and little did it know then about the upcoming dot-com implosion and economic downturn.
Recently however, while not exactly in its prime, ERP bears its ripe middle age well, while CRM vendors are largely finding other creative ways to describe their purpose (e.g., "a leading extended e-Business solutions provider"). Having experienced a rude awakening from an extreme and often unjustifiable enamor with dot-com's non-viable business models, and owing to a backpedaled growth of yesterday's hot items like CRM, supply chain management (SCM) or e-procurement, many experts have suddenly again had an epiphany about the importance of solid back office transactional systems. Namely, there is a renewed recognition that ERP is imperative to managing and controlling internal materials movements and processes, and it forms the foundation for collaboration, e-Business, CRM, SCM and so forth.
Some pundits have even reverted to predicting moderate growth for the ERP market despite unfavorable economic conditions. Therefore, while the traditional introspective mind-set of ERP becomes history, its functionality remains critical. The 'new economy' will not have caused the obsolescence of general ledger and accounts payable & receivable for example. Quite the contrary, it will have only emphasized their importance.
Destiny or not, the near-death experiences of many ERP players, which will almost all have meanwhile found another proprietor, had marked the end of an era when robust, inward-oriented enterprise transaction-crunching product suites were a guarantee of success. Today's enterprise applications are required as a matter of course to address more than the processes taking place within the walls of an enterprise.
The company had hemorrhaged money for several years, and its stock was de-listed from NASDAQ last year. During the past two months, it has further shed 75 employees, albeit at its prime, it employed 450. Its assets, including a notable customer base in Financial Services and Insurance (e.g., Citigroup, Citibank, Allstate, JP Morgan Chase, Fidelity, etc.), Retail (e.g., Bose, Gateway, Circuit City, Staples, etc.), and Telecommunications sectors (e.g., Sprint, Verizon, etc.), were auctioned off on March 11. The auction was reportedly held at the law offices of Reimer and Braunstein LLP in Boston and included everything from customer contracts and patents to computers, equipment, and office furniture, according to reports.
Initially, allegedly over 20 companies expressed interest in buying Xchange's assets, and in maintaining its products and supporting its customers, including direct competitors Chordiant Software, DoubleClick, SAS and Unica. While marketing management software vendor Unica was initially marked as a very likely buyer of the company, the vendor, however, announced on March 10 that it had elected not to make a bid for the Xchange's assets. Rather, Unica has announced a migration plan from Xchange's solutions to its Affinium platform. The vendor has reportedly decided not to participate in the auction, because Xchange's main assets — the software developers — were likely no longer with it. Also, Unica has already migrated approximately 15% of Xchange's customer base to Affinium, and the vendor touts that regardless of which company takes ultimate ownership of Xchange's remaining assets, converting to Affinium will be the most attractive solution for Xchange customers.
Consequently, given Unica's and DoubleClick's absence from the bidding, the winning bidder was Amdocs (NASDAQ: DOX), a provider of billing systems, customer care and support for the communications industry. Amdocs, which was not initially expected to be a strong bidder, reportedly outbid SAS to win the Xchange's remains for slightly more than $5 million. Although not a stranger to CRM products acquisitions given its earlier acquisition of the former leading CRM product Clarify in 2001 for $200 million (see Clarity of Vision: Clarify Sold to Amdocs by Nortel ), its latest acquisition of Xchange has raised many eyebrows. Amdocs does not have a blissful track record with the former purchase so far. To be fair, Amdocs has not exactly left the ClarifyCRM product in the dust, given the release of ClarifyCRM 11 in September 2002, which featured thin client support, a process manager module, and an XML-based integration gateway.
On the other hand, even during 2002, while battling to secure new finances, Xchange surprisingly managed to build a strong real-time engine to deliver targeted promotions based capability to detect important customer events and behaviors from transactional data throughout multiple marketing channels within an enterprise. Even as late as January 9, 2003 the company announced the release of its Xchange 9 browser-based suite that enables marketers to automatically trigger an appropriate communication to the customer immediately after they exhibit a behavior representing a cross-sell, up-sell, or retention opportunity, and that thereby answers the question when' to initiate a marketing interaction. Further, the Xchange 9 EDM (Event Driven Marketing) Option allows users the ability to observe data from multiple sources within the enterprise, look for changes to the state' of the customer, and action the direct marketing via the Xchange 9 platform, which is in contrast to leveraging historical information using traditional data mining tools or writing complex SQL-based queries to produce new predictive models long after the marketing opportunity has past.
One may sound too wise after the event, but the writing on the wall had long been visible for Xchange, and for many like marketing campaign management specialists. The CRM market remains both the land of opportunity but with many treacherous patches of quicksand for those that are not certain about their footprint breadth in the field. It has been a �no brainer' the fact that the 2000s have been adverse years in the entire enterprise applications market. Following the whopping growth rates of the late 1990s, and the spending surge on sexy e-Business-related technology in 2000, hard times worldwide and in almost all sectors have since subsequently morphed into harrowing times for all enterprise systems providers alike. While the biggest and/or the richest have been able to hang onto flat new sales, possibly modest declines, or in other cases possibly modest growth, only a lucky and/or the most apt few with a true differentiation in a selected number of markets (e.g., supply chain execution (SCE)) have even bucked the trend and have shown some enviable growth.
It might be interesting to analyze the recent years of enterprise resource planning (ERP) and customer relationship management (CRM) markets to discern how fortunes may often fluctuate and go in different directions. The term ERP, if not necessarily coming back into fashion, certainly is no longer a bad, �pass�' term of a few years ago, when almost all vendors were distancing themselves from the association (like from a plague) because ERP was then perceived as off-putting (i.e., intra-enterprise vs. entire supply chain and collaboration focus). At the same time, anything associated with customer or front-office interaction was all the rage, attracting both venture capitalists to pour their capital into new startup companies with brave ideas, while the customers were (over)buying these applications owing to then buoyant economy and the apparent need to better manage seemingly mushrooming customer bases.
The appeal of marketing automation has come from its ability to tailor marketing campaigns and to track their effectiveness and control marketing costs and to perform better targeted, finer-grained, multi-stage campaigns. Having also gathered a number of high-profile early adopter customers worldwide, and enticed by then large market capitalizations, Xchange had followed suit and had gone public (NASDAQ: EXAP), and little did it know then about the upcoming dot-com implosion and economic downturn.
Recently however, while not exactly in its prime, ERP bears its ripe middle age well, while CRM vendors are largely finding other creative ways to describe their purpose (e.g., "a leading extended e-Business solutions provider"). Having experienced a rude awakening from an extreme and often unjustifiable enamor with dot-com's non-viable business models, and owing to a backpedaled growth of yesterday's hot items like CRM, supply chain management (SCM) or e-procurement, many experts have suddenly again had an epiphany about the importance of solid back office transactional systems. Namely, there is a renewed recognition that ERP is imperative to managing and controlling internal materials movements and processes, and it forms the foundation for collaboration, e-Business, CRM, SCM and so forth.
Some pundits have even reverted to predicting moderate growth for the ERP market despite unfavorable economic conditions. Therefore, while the traditional introspective mind-set of ERP becomes history, its functionality remains critical. The 'new economy' will not have caused the obsolescence of general ledger and accounts payable & receivable for example. Quite the contrary, it will have only emphasized their importance.
Destiny or not, the near-death experiences of many ERP players, which will almost all have meanwhile found another proprietor, had marked the end of an era when robust, inward-oriented enterprise transaction-crunching product suites were a guarantee of success. Today's enterprise applications are required as a matter of course to address more than the processes taking place within the walls of an enterprise.
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